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In 2006, California voters wisely rejected Proposition 90, a stealth measure that would have dramatically reduced government’s ability to protect the environment, enact zoning laws, and engage in many other regulatory activities that enhance Californians’ quality of life. Having lost on Prop 90, the Howard Jarvis Taxpayers Association has come back with a supposedly scaled back version, Prop 98.

Prop 98, however, is every bit as overbroad and dangerous as Prop 90, and even more deceptive. If it passes, it will repeal rent control. It also may cripple California’s ability to deal with the significant natural resource and infrastructure challenges facing the state, as well as undermining government’s ability to enact effective zoning measures and to protect the environment.

First, some history. In 2005, the Supreme Court, held that a city could use eminent domain, consistent with the U.S. Constitution, to forcibly purchase a private home to encourage private redevelopment. The decision sparked an outcry across the political spectrum, and broad support formed for banning government from taking private homes for private development projects.

It would be straightforward to accomplish that goal by simply banning government from transferring private homes to private developers. But, unfortunately, certain conservative anti-government groups took advantage of the situation by submitting ballot measures across the country that, in name, were limited to the taking of private homes for private use, but in effect, contained buried text that exploded the definition of eminent domain to include most regulation, including environmental and zoning laws. Prop 90 was one of those stealth measures.

After the defeat of Prop 90, Democrats in the California Legislature introduced a constitutional amendment (Assembly Constitutional Amendment 8) to reform eminent domain by prohibiting use of eminent domain to acquire an owner-occupied home or a small business for transfer to another private party. ACA 8 had the strong support of the League of California Cities and the League of Conservation Voters, but Republicans in the Legislature killed it, because they wanted a broader Prop-90-style measure. (The League of California Cities then collected signatures to place the measure on the ballot as Prop 99, which is a good, common-sense eminent domain reform without a hidden agenda.)

That measure is Prop 98. Its statements of findings and purpose seem innocuous enough and appear to limit the measure to reforming eminent domain. However, when one examines the text, and particularly the definition section, its broader impacts becomes clear:

→→ Prop 98 explicitly repeals rent control statewide. It leaves local jurisdictions with no ability to control escalation of rents. Whatever one’s views on rent control, this is a draconian measure that would eliminate local control of this very local issue.

→ After banning the taking of private property for private use, the measure defines “private use” to include the taking by a public agency of private property “for the consumption of natural resources.” The measure therefore would prohibit government agencies from using eminent domain, for example, to acquire property for public water projects to increase California’s capacity to store, transport, and deliver water. The language also likely bars use of eminent domain for preservation of open space.

→ Prop 98 further defines prohibited “private use” as regulation of private property in order to “transfer the economic benefit” to another person. This language could have devastating effects on land use planning and environmental regulation by barring government from engaging in regulation that reduces the market value of property. Examples of prohibited activities could include historic preservation laws and height limitations. All zoning decisions arguably transfer economic benefits among property owners, as courts have held, and this measure therefore would reduce the ability of government to engage in traditional land use regulation – regulation that is especially important in dense urban environments.

→ The “transfer economic benefit” prohibition also would create problems for new development. Any land use or zoning decision designed to facilitate new construction could be tied up in court on the ground that it transfers an “economic benefit” from current property owners to new ones, such as reduction of a view or changes in traffic patterns – changes that could reduce property values.

→ Prop 98’s “transfer economic benefit” language also could seriously limit government’s ability to require developers to provide public benefits in connection with development, such as making street improvements, contributing to park enhancements, or other expenditures traditionally required of developers in order to provide adequate public infrastructure to support the increased population that development spurs.

→ Prop 98 also fails to provide an exception for health and safety regulations and is arguably retroactive to existing regulations. This makes Prop 98 more extreme than Prop 90, which contained a health → Given how vaguely Prop 98 is drafted, it will create immediate and significant litigation. Any decision by government in California that arguably affects the value of property or arguably transfers an economic benefit from one property owner to another will result in a court challenge seeking compensation and injunctive relief. Even if courts eventually interpret the measure narrowly, taxpayers will spend huge sums of money litigating its scope. In San Francisco, the funding for this litigation will typically come directly from the General Fund – i.e., the fund that pays for parks, street repairs, police, and other services on which we all depend.

California, and the Bay Area, are growing rapidly and will continue to do so for decades. We have seen the results of poor planning in California – clogged roads, pollution, suburban sprawl that covers up open space, inferior public transit, and a looming water crisis because of inadequate storage capacity. We need our government to be able to plan effectively for growth. Prop 98 is exactly the opposite of what we need and will take California in the wrong direction.

In 2007, Walgreen Co. had net income of $2.04 Billion. With 6,271 Walgreen's stores nationwide, the average after-tax profit is $325,306 per store. That's their “take-home-pay.” Per Walgreen's own spokesperson, Todd Horton, with 54 stores in San Francisco, Walgreen's only donated $100,000 to local charitable causes in 2007 (about $1,850 per store), a mere 0.57% of their approximate San Francisco net-profit of $17.5 Million. Industry standard for corporate giving is 2.0% to 5.0%. The recent $5,000 contribution to Harvey Milk is nice, but far from being a good neighborhood business and community partner.

If Walgreen's were to expand the specialty pharmacy into the space at 4127 18th Street, the total Walgreen's footprint in the Castro Neighborhood Commercial District (NCD) would reach 14,000 square feet (slightly larger than 1/4 the size of the giant Safeway on Market).
For over 4 years, Supervisor Bevan Dufty has been pleading with Walgreen's to improve the look of the front of their Castro store. They haven't. The loiterers and dated window displays remain. The paint has not been refreshed in a generation.

The memberships of several of our neighborhood groups have gone on record opposing the expansion. Our goal for Castro Village is to keep it vital and diverse. A conversion of yet another neighborhood- serving business into a generic corporate giant will accomplish neither of these goals.

The space into which Walgreen's hopes to expand had been a thriving laundromat for several decades. Per the SF Tax Collector, the laundromat ceased operations in November 2006. The landromat operator declined to give reasons for the closure. In only three months (over the holiday season), Walgreen's developed a corporate plan for the space and in February 2007 signed a 20 year lease. Spokesperson Todd Horton would not reveal how the rent Walgreen's is paying compares to that of the laundromat, saying it was proprietary.

For the past 15 months the former laundromat space has remained unoccupied as Walgreen's pays the rent. A primary argument for allowing Walgreen's and other unattractive chains into Castro Village is that empty storefronts are bad for business. This is undisputed. But if Walgreen's had any sense of community, it would have offered the space for use as a gallery or by a non-profit while waiting for permits. At least it would not have been left vacant. Walgreen's supporters fail to mention that certain property owners and leaseholders in the Castro apparently don't need nor care to lease or
occupy their properties. The owner of the largest restaurant space in the neighborhood, who also owns a bar on 18th Street, seems content to leave them vacant in perpetuity. Others are asking obscene rents.

What many of us have been working hard to achieve is a neighborhood commercial district that attracts local residents, but also encourages people to come and shop because we offer something that other neighborhoods do not. We have several other Walgreen's within walking distance (one just three blocks away at Market & Sanchez). Having yet another will not bring us more business or vitality. There is only one Cliff's Hardware, only one Buffalo Foods, only one De La Sole shoes. These are businesses that add to the fabric of our village. Please don't sell us out.

The American economy is in a recession. California faces at $10 billion budget gap. San Francisco’s projected budget shortfall is approximately $350 million. That our neighborhood isn’t exempt from financial problems is attested to by many empty storefronts, including four on Castro Street between Market and 19th Streets. On 18th Street between Castro and Collingwood Street a former laundromat is empty. Across from it, the space housing De La Sole will soon be vacant, as the shoe store relocates. When they move, three spaces on that block will be empty.

Empty storefronts attract vagrants, litter, and crime. Thanks to San Francisco District 8 Supervisor Bevan Dufty, during the 2007-08 fiscal year, the Mayor’s Office of Economic Development awarded the LGBT Center a $25,000 Business Attraction Grant. The Castro/Upper Market Community Benefits District (CBD) added $15,000 and the Merchants of Upper Market and Castro (MUMC) contributed $10,000 to fund the program. Thanks to Ken Stram, the Center’s Director of Economic Development, much has been done to attract new businesses to the neighborhood and dispel misperceptions that the Castro is anti-commercial enterprise. The process is slow and hence, thanks to Dufty, the City will renew its grant for the 2008-09 fiscal year. The CBD will again contribute $15,000. MUMC, however, which operated at a deficit last year, won’t contribute. Dufty will ask local businesses to make up that shortfall.

Walgreen’s wants to expand into the long vacant former laundromat on 18th Street to accommodate new health services that offer a holistic approach to physical well being, including nutrition counseling. Walgreen’s won’t duplicate services or products they currently offer at their store on Castro and 18th Street. The new space will also have a meeting room that will be made available at no cost to community groups.

Is Walgreen’s a good corporate citizen? They recently donated $5,000 to a Eureka Valley school and replaced the worn out carpeting at the Community Meeting Room above the Bank of America Branch on Castro Street. They are strong supporters of the CBD. They’re working with Supervisor Dufty to design more attractive window displays at their main pharmacy.

Some people prefer to wait indefinitely for another tenant, although no one else has shown interest in this space. Others claim that Walgreen’s is offering new services to make a profit. But profit is the engine of
American capitalism. Still others doubt the viability of the new programs, despite their success in other locations.

Opposing Walgreen’s expansion and its willingness to make a long-term investment in our neighborhood without offering a viable alternative sends a negative message. It says that despite the financial contributions of the city and neighborhood groups aimed at bringing thriving enterprises to the area, the EVPA prefers a dingy, empty storefront to a dynamic, viable business.

In the April Eureka! we reported that the newly restored CASTRO Theatre marquee has been hit not once, but twice since the recent restoration to its classic 70's appearance as part of the filming of the movie MILK. One of the collisions broke some of the newly installed neon lighting tubes. The Castro Theater is designated San Francisco Landmark No. 100.

We are happy to report that an interim solution has been agreed upon by the merchants, the city and the Theatre. Two large trees in big containers will be placed out in the street, one on each end of the Marquee. Because the street sweeping machines will not be able to sweep between the containers, the theatre will be responsible for cleaning the street between them. A long term solution will be a welcome part of a Castro Street capital improvement plan.

Help Transform Your Muni System. The Transit Effectiveness Project (TEP) will share preliminary proposals for Muni service changes and reliability improvements to nearby routes F, K, L, M, 24, 33, 35, 37. The TEP’s preliminary proposals aim to transform Muni into a first-rate transit system, reducing congestion, decreasing pollution and getting people where they want to go efficiently and safely. Changes have been proposed for most Muni routes ranging from increased frequency on our busiest lines to route eliminations which have the fewest customers. With your help, a revitalized Muni system will not only benefit current transit customers, but will improve mobility for everyone who lives, works in or visits San Francisco. There will be a Fast Pass raffle at the meeting. For more information, visit www.sftep.com , email info@sftep.com, or call 311.

In conjunction with Supervisor Dufty & MIG Consultants, the Planning Department announced that the draft of the Upper Market Community Design Plan has finally been created. The plan created with major input from the community will be unveiled at this Open House. Come see the recommendations within the plan and learn the next steps needed for implementation of the plan. Copies of the draft plan document are available on the project's website: http://uppermarket.sfplanning.org .

BETTER STREETS SAN FRANCISCO
Late June, 2008

There will be an announcement made to all online EUREKA! Subscribers when the meeting is scheduled.